Knowledge Bridge

//Kevin Anderson /December 20 / 2012

Tempo Media’s Harymurti: the digital transition is all about the timing

Indonesians are embracing digital media, especially social media. In September 2012, the country topped the charts of Facebook user growth, according to Socialbakers. More than 7.6 m Indonesians joined the site in that month alone – although the country also is a leader in the creation of fake accounts.

The use of social media isn’t just in urban areas, participants in MDLF’s Media Forum 2012 in Jakarta were told.

Riza Primadi: In rural Indonesia people call smartphone "Facebook Phones." Gather where signal is stongest and use Facebook. #MDLF2012

— Harlan Mandel (@HarlanMandel) December 2, 2012

It’s estimated that 20 percent of Indonesians over the age of 14 now access the internet – some 30 m people, according to The Jakarta Post – and 70 percent of those 30 m people access Facebook each month.

Internet access and use is still concentrated in urban areas, but with second-hand smartphones and mobile internet access now reaching even remote areas of Indonesia,  the whole country is starting to go digital. One third of those who access the internet do so over their mobile phones. The revolution is not only digital but also mobile.

The revolution in digital media in Indonesia is not just about using Facebook. In a 2012 Nielsen report (PDF), Indonesia was ranked second in the world in a mobile video usage index.

Media companies there know they need to adapt to catch this digital wave, according to Bambang Harymurti, the CEO of Indonesia’s Tempo Media. However, just like catching a wave in surfing, riding the digital wave is all about the timing – too early or too late and media companies will miss it, he said.

Part of the challenge is technological. “You know the price of this technology is decreasing while its capacity is increasing,” he said. If you buy too early, you will have paid too much for technology that will quickly be out of date but, of course, if you are too late, you can also find yourself in trouble, he added. “You have to be just at the right time.”

To get the timing right, Harymurti said that media leaders need to take into account not only the digital usage of their audiences but also the extent to which advertisers have embraced digital.

“If you are a media leader, you need to cater both to your viewer or your reader and your advertisers,” he said.

What makes the timing even more challenging is that media audiences, readers or viewers, “are much more advanced” in using digital media than advertisers, he said.

The ratings agency Nielsen found a huge shift in media consumption in China, India and Indonesia. “This emerging group of consumers are young, they have grown up as a digital generation, and most have bypassed traditional technologies such as fixed-line telephones and desktop computers,” the Nielsen report found.

The report also found that while digital media use is rising rapidly across the region, digital advertising lags behind the global average of 14 percent share of total ad spend. In Indonesia, free-to-air television advertising dominates ad spending with digital trailing far behind television, newspapers and magazines.

Media leaders must find a way to bridge this gap between consumers shifting to digital and advertisers still focused on non-digital media.

Harymurti said that if media companies race out ahead with their audience, they might leave their advertisers behind, which means that they won’t have the revenue necessary to sustain their business. “That can kill you,” he said, highlighting the dilemma by adding, but “if you are too late, the viewer might leave you.”

In terms of advertisers, media companies should not simply wait for them to catch up with digital audiences. In Indonesia, like many markets, media companies have to educate advertisers about the opportunities that digital media provides, Harymurti said. “We have to be willing to invest a little bit to educate our advertisers.”

‘Unlearn your old model’

Timing isn’t the only challenge in the transition to digital. Harymurti also said:

The digital, which is going to be your future, is a different landscape. You have to have the ability to unlearn your model. This is sometimes the most difficult part. You don’t want to just put on digital the print format.

It’s a change in culture, often built on the workflow of previous media. Sometimes, to be able to change the culture, you will need new people with new skills, he said.

For instance, writing and producing a newspaper or a magazine has its own rhythm, a rhythm that might not be appropriate to the continuous demands of digital media. “To adapt to this, you have to destroy this old habit and build a new one,” he said, adding: “This is not easy, people do not like to be dragged out of their comfort zone.”

Meeting the mobile challenge

The challenge of digital is not static either. Initially, digital only meant producing content for a web browser, of which there are only a handful. However, with one third of Indonesians accessing the internet using a mobile phone, this also adds complexity to this shift to digital. Publishers need not only to adapt their content for smaller screens of mobile and smartphones, but they also must take into account the dizzying number of different handsets. Technology can help adapt your content, Harymurti said.

“What you read on one page in a magazine and what you read on one small screen is different. You have to find new ways to keep people reading more from one screen to another instead of one page to another or one column to another.”

Young people use their mobile phones primarily to talk to their friends on Facebook, but as they grow older they will want media, he says. To start that habit though, “we have to catch them on Facebook, catch them on Twitter, and hopefully get them to our site,” he said.

There is no textbook on how to do this so you have to try new things and see what works, he says, and what works today, may not work tomorrow.

“Technology changes. We have to be a very changeable management,” he said.

Monetising mobile audiences

While audiences are increasingly moving to mobile, consuming more content both on smartphones and tablets, just as they did with the desktop internet, advertisers have lagged behind audiences in shifting to digital.

French digital media strategist Frédéric Fillouxwrote this week:

Mobile audiences are large and growing. Great. But their monetization is mostly a disaster.

The situation will improve he added, but a number of things will have to happen. He’s optimistic that the situation will improve, but advertisers will have to take advantage of the unique features of mobile, including geolocation and the ability to scan bar codes to really unlock mobile’s revenue potential.

In Indonesia, the major shift has been Apple, iTunes and its content-selling service Newsstand. Even with Apple’s cut, about 50 percent he said, the revenue from a digital edition of their magazine or newspaper is still higher than it was in print. “We doubled our margin,” he said. They have also had success in selling a PDF version of their print content.

At the moment, older readers are more willing to pay for digital than younger audiences, he said. While they build their digital audiences, they are using this time to continue educating advertisers. By combining their print and digital circulation, they can make the case that advertisers can reach a larger audience than print alone.

For media leaders looking to start the digital transition, he said that they should seek investors who will help them build their capacity. “The digital world gives us a golden opportunity to reach more people in a much cheaper and faster way and, of course, that is our dream as journalists to reach as many people as possible.”

Article by Kevin Anderson